Class 3 (SOT) Guide

class3

 
17Dec

NFA MEGA Reference Guide

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27 CFR 179.11: MEANING OF TERMS
Mere possession of a license and a special tax stamp as a dealer in firearms  does not qualify a person to receive firearms transfer-tax free.

ATF Rul. 76-22
The mere possession of a license and a special (occupational) tax stamp as a dealer in firearms does not qualify a person to receive firearms transfer-tax-free. Any person holding license and a special tax stamp as a dealer in firearms and not actually engaged within the United States in the business of selling NFA firearms may not lawfully receive NFA firearms without the transfer tax having been paid by the transferor.

Where it is, therefore, determined that the proposed transferee on a Form 3, Application for Tax-Exempt …

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17Dec

Setting Up at Demos and Trade shows

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Once you obtain your FFL & SOT (Class 2/3), you can buy or make fully automatic weapons for government sales or government demonstration purposes only. If you get an FFL type 07 and then an SOT – You can MAKE without a dealer demo letter, but to BUY… you still need a dealer demo letter from law enforcement. If you have FFL 07 and SOT submit Form 2 to make/convert a semi-auto to full auto. All SOT dealers must have a dealer demo letter to purchase a machine gun made after 1986. We buy direct from the manufacture and have an UZI, M16, …

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17Dec

Which Wholesalers Do I Buy From?

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This has changed significantly over the last 5 to 10 years.  The largest silencer wholesaler is SilencerShop.com, the owner was an FFL123.com customer so I am somewhat partial to working with Dave in Austin.  Tell him Brandon from FFL123.com sent you!  Beware though, he is also your LARGEST COMPETITOR.

We honestly buy from all wholesalers, Lipsey’s, Bill Hicks, Jerry’s Sports, Allen Arms.  We purchase directly from AAC.  Just email me if you need help finding products.

Dakota Silencer will wholesale our products in states where we don’t have a store.  The great thing about selling Dakota Silencer products is …

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27Nov

Example Class 3 Forms for Trust

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We still recommend a Gun Trust for all our customers.  The paperwork looks more involved, but not if you educate the customer to only put one person on the Trust.  After Form 4 approved and silencer transferred, customer can add additional Trustees with no additional ATF paperwork required.

Customer Purchasing Through A Gun Trust

Customer needs to provide you these following items.  We do like the Silencerco’s dealer examples.

  • Two FBI fingerprint cards (FD-258) per silencer purchased (Example)
  • Two ATF Form 4’s (5320.4) per silencer purchased (Example)
  • One ATF Form 5320.23’s per Trustee and per silencer purchased ( Read more
 
27Nov

How Should Customer Fill out Silencer Paperwork?

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The key to success in selling silencer as a Class 3 dealer is making the process easy for both you and your customers.  Try to complete all the paperwork while you are with the customer live.  If you have to send the customer the paperwork, complete as much as you can do as a dealer before sending to them.  The ATF 41F changes will benefit the “local” dealer and make it harder for the mega stores to dominate in my opinion.  Remember, in simplest term, this process is like buying a truck.  You are asking ATF to transfer title of ownership …

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27Nov

Next Steps

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Begin deciding which NFA products you plan to sell. If you plan to sell silencers, start determining which manufacturers you wish to work with. Do competitive research to see what is being sold locally in your area. All manufacturers will approve your application to become a licensed dealer for them. They will request a copy of your FFL and your SOT Dealer’s License. It is a good idea to scan these items and save them in PDF format for easily emailing to manufacturers for orders, etc.

When you buy an NFA item from a manufacturer, they will handle all of the …

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27Nov

Important Note

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If you do not renew your SOT license, you can keep any NFA items (except automatic weapons that were dealer samples made Post 86 ban) you obtained while in business without paying the $200 transfer tax. How? If you applied for your FFL as a sole-proprietor (under your own name, not a corporation), you are fine. The NFA approval automatically stays in your name and no tax is due even if you let your SOT expire. This is clearly noted in the NFA Handbook. If you opened your FFL and SOT under the umbrella of a corporation (as we …

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    I operate my FFL business online, at gun shows and operations in several states. I have learned all the tricks of the trade.

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